Cultivating Energy Efficient Farms

April 24, 2012
By
Shaun Daniel, Guest Commentary

A little over a month ago, I attended the Central Minnesota Farm Show in the River's Edge Convention Center in St. Cloud. The 2012 show was perhaps the biggest yet. Both attendees and vendors commented on the broad variety of things to see in wandering the pathways of tables and booths: Farm insurance agents, geneticists, seed and equipment vendors, towering John Deere tractors. But what was lacking amid the newest farm technology was an abundance of information on improving farm energy efficiency.

While we had a table set up for The Minnesota Project, and a couple electric utilities were also present to promote energy efficiency with information on their programs, there wasn’t as much other information as there could have been. Perhaps this illustrates the untapped opportunities still available to Minnesota farmers to improve the energy efficiency of their farms, save themselves some money in the process, and help conserve our resources.

A few years ago, the Minnesota State Legislature passed a bill into law titled The Next Generation Energy Act of 2007. The bill’s Renewable Energy Standard (RES) was a much talked about provision, which set statewide goals of producing 25 percent of our electricity through renewable energy by 2025. A less talked about provision was the Energy Efficiency Resource Standard (EERS), which challenges Minnesota’s electric and natural gas utilities to reduce their electricity sales by one-and-a half percent each year by providing energy efficiency/conservation programs to their customers.

The great thing about Minnesota’s EERS is that all utilities in Minnesota have programs available, generally as a rebate. Thus, while only a select few will ever be able to construct a renewable energy project, all Minnesotans have an opportunity to take advantage of their utility’s energy efficiency programs. Given the amount of power that goes into many agricultural businesses, farmers stand to benefit from the assistance that utility rebate programs can provide in making their operations more efficient and sustainable. And with ROIs of 30 percent, and sometimes much higher, it makes business sense to pursue energy efficient upgrades.

There are a number of other programs that can help with financing such upgrades. For example, the Minnesota Department of Agriculture created the Sustainable Agriculture Loan Program to promote innovative management practices that enhance farms’ profitability and benefit the rural environment. Loans up to $40,000 per family (or up to $160,000 for a joint project) are available at a three percent interest rate for up to seven years to support capital purchases that enhance a farm’s environmental and economic viability.

At the Federal level, the USDA’s Rural Energy for American Program (REAP) offers strong support to agricultural businesses with both loans and grants. The loan program guarantees up to 85 percent of the loan amount on loans up to $25 million, but can go as low as the minimum of $5,000. Meanwhile, the grants program covers up to 25 percent of the total eligible project costs, which are limited to $250,000 for energy efficiency improvements. Requests as low as $1,500 are considered. A farm energy audit is required to outline present energy usage. An upgrade plan with costs and projected savings is also included. An example of the impact of the grants program: In 2011 Minnesota producers obtained $292,000 for both energy efficiency and renewable energy projects.

The National Resource Conservation Service (NRCS) also has several useful programs in its Environmental Quality Incentives Program (EQIP). Through the EQIP program, the NRCS offers the Agricultural Energy Management Plan (Ag EMP), which is meant to help agricultural producers transition to more energy efficient operations and help fund on-farm energy audits. The Ag EMP gives an overview of a farm’s energy use, while also listing recommended efficiency improvements. After establishing an Ag EMP, farmers will eventually be eligible to have the recommended improvements cost shared through an additional EQIP conservation activity.

Beyond these programs, there is a wealth of farm energy efficiency information available online. The Minnesota Project has been working to collect some of the best in its Farm Energy Efficiency Resource Center and our new Dairy Energy Efficiency page. Farmers may be interested in the services offered by our Farm Energy Auditor Training Program graduates, and a recording of a recent webinar exploring the utilities' rebate programs. Other great organizations with resources focused on energy efficiency and renewable energy are University of Minnesota Extension; DSIRE, the database of state incentives for renewables and efficiency; the Institute for Agriculture and Trade Policy, which does a great job of analyzing energy policy as it relates to agriculture; the Clean Energy Resource Teams (CERTS), which work with communities across the state on local efficiency and renewable energy projects; and ATTRA, which recently had its federal funding restored to offer technical assistance services for farmers at no charge.

The Central Minnesota Farm Show provides a great opportunity to talk with farmers about some of the latest thinking in agriculture. For those who don’t have a lot of experience with farm energy efficiency and renewable energy, it can help connect them to useful resources. I hope that next year energy efficiency will have an even greater presence at the show. By improving energy efficiency, it is our hope that we can help farmers conserve resources and make their farms more sustainable, cost effective and profitable—something that, in the end, benefits us all.